We examine the Indian bank asset quality review, which doubled the declared loan delinquency rate. Relative economic stability during the exercise and the absence of a capital backstop together make it unique. We find that the expected reduction in information asymmetry does not automatically...

We show that finance influences innovation by young private firms, an important source of long-term economic growth. We develop a simple theoretical model that predicts that a decrease (increase) in banks' bargaining power vis-a-vis entrepreneurs increases (decreases) both the volume and...

Venture Capitalists (VCs) differ from one another with respect to the non-financial resources they offer their portfolio firms. We develop a theoretical model to study the economic implications of this heterogeneity among VCs. We determine the optimal VC chosen by the entrepreneur, the...

Does deregulation of bank entry enhance bank stability or exacerbate bank fragility? Since the theoretically predicted effect of deregulation of bank entry on bank failures is ambiguous, this question has to be answered empirically. In this paper, we analyze the impact of deregulation of entry...

Venture Capitalists (VCs) differ significantly from one another with respect to the non-financial resources -- from business expertise to the network of contacts with potential suppliers, customers, employees and IPO underwriters -- they offer their portfolio firms. In this paper, I develop a...

The localization of Foreign Direct Investment (FDI) to a few economies represents a puzzling aspect of international business. We study the provision of public infrastructure as a determinant of such localization. We employ unique data at the district level in India. We identify using variation:...

Strategic default by firms remains a global concern. Although the theoretical literature studies this phenomenon, empirical evidence is scant as data categorizing defaults as strategic or distress-driven is unavailable. We use unique data from India to investigate how firms that strategically...

We estimate the value of innovative assets using the value paid for private, innovative targets. Since young, private firms are the primary drivers of mold-breaking innovation, we focus on such firms. We adopt a novel approach that uses the price paid for young, private targets together with...

Although court judgments on economic issues are frequent, their impact remains understudied. Unlike laws, studied extensively by law and finance literature, they are not publicly debated, not passed by legislators, and do not always factor in economic implications. Studying an unexpected verdict...